Ladies and gentlemen, thank you for standing by. Welcome to the Liberty Media Corporation’s First Quarter 2022 Earnings Call. During the presentation all participants will be in a listen-only mode. Afterwards, we will conduct a Q&A session. [Operator Instructions] As a reminder, this conference is being recorded May 6. I would now like to turn the conference over to Courtnee Chun, Chief Portfolio Officer. Please go ahead.

Thank you. Before we begin, we'd like to remind everyone this call includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual events or results could differ materially due to a number of risks and uncertainties, including those mentioned in Liberty Media's most recent Forms 10-K and 10-Q or Liberty Media acquisitions most recent Form 10-K and 10-Q filed with the SEC. These forward-looking statements speak only as of the date of this call and Liberty Media and Liberty Media Acquisition expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in Liberty Media or Liberty Media Acquisitions expectations with regard with regard there to or any change in events, conditions or circumstances on which any such statement is based. On today's call, we will discuss certain non-GAAP financial measures for Liberty Media and SiriusXM, including adjusted OIBDA and adjusted EBITDA, the required definitions and reconciliations for Liberty Media and SiriusXM. Schedules one and two can be found at the end of the earnings press release issued today, which is available on Liberty Media's website. Now I'd like to turn the call over to Liberty President and CEO, Greg Maffei.

Thank you, Courtnee, and good morning to all of our listeners. Today. Speaking on the call we'll also have Formula One's President and CEO, Stefano Domenicali and Liberty's Chief Accounting and Principal Financial Officer, Brian Wendling. So I'll begin with Liberty SiriusXM, we received $872 million of gross dividends from SIRI tax free in the first quarter including the special and regular dividend. We, because of the nature of our convertible bonds, we had to pass through a $30 million of that special dividend. We continued our share repurchases repurchasing $182 million across LSXMA/K from February to April. We repurchased those at a look through price on Siri of about 356 a share. We of course remain disappointed with the discount and attack it as much as we can. We are very focused on long-term value creation for our shareholders. Now looking at SiriusXM itself, solid start to the year, continue to perform well financially despite a challenging auto market. Revenue was up 6%, monthly churn was wonderful down at 1.6%. And we had record ARPU up 9%. New car penetration for SiriusXM is now at 83% and is enabled a fleet of 146 million cars here in the US. As expected self-pay net ads were down slightly due to challenges in the auto market. This was partially offset by strength in digital, and we had a 50% increase in the subs listening digitally to our on demand content. I'd also note we launched our first ever streaming channel [Freakanomics] dedicated to podcasting and available across all the SXM platforms. SXM media was named the number one podcast ad network according to Edison Research, and we represent four of the top 15 podcasts in the country with the addition of Crooked Media in this month. Also beginning with this year's…

Thank you, Greg and good morning, everyone. In January, we settled exchanges of the 2.25% Live Nation exchangeable bonds for total consideration of $664 million, funded with cash and margin loan draws. At quarter end, Liberty SiriusXM Group has attributed cash and liquid investments of approximately $634 million, which excludes $76 million of cash held at SiriusXM. There's also $1 billion of undrawn margin loan capacity at the parent level related to our SiriusXM and Live Nation margin loans. As of May 5th, the value of the SiriusXM stock held at Liberty SiriusXM Group was $19.7 billion and the value of the Live Nation stock held was $6.6 billion. We have $3 billion in principal amount of debt against these holdings. Total Liberty Sirius XM Group attributed principal amount of debt is $13.9 billion, which includes $9.9 billion of debt at SiriusXM. Formula One Group had attributed cash liquid investments and monetizable public holdings of $1.6 billion at quarter end, which excludes $834 million of cash held directly at Formula One. Total Formula One Group attributed principal amount of debt was $3.4 billion, which includes $2.9 billion of debt Formula One, leaving $454 million at the corporate level. F1’s $500 million revolvers undrawn and Formula One leverage at the end of the quarter was 3.7x meaningfully within our target leverage range of less than 5x. As of quarter end, we are no longer in a period of covenant waiver. Looking at a few cash items on Formula One, Formula One estimates its cash tax rate in 2022 to be single digit, a single digit percentage of adjusted OIBDA, increasing modestly to low double digits in 2023, and thereafter, as a result of the UK tax rate increase, effective next year. Additionally, Formula One is currently undergoing a project to refurbish…

Thanks, Brian. I'm thrilled to be in Miami this morning. As we have set for the inaugural Miami Grand Prix. The seat is buzzing with excitement, and we are looking forward to the weekend. The 2022 season is off to a phenomenal start. The many changes to the cars and regulation have resulted in improved racing. The cars now follow more closely, enabling greater opportunities for wheel to wheel racing with drivers trading position multiple times, making them think more strategically about the moves. The sprint is back and we held our first event of the season in Imola that came down to the final few laps. It turned out to be a Grand Slam weekend for Red Bull heading qualifying before winning both the race and the sprint and securing extra point for the fastest lap. The first sprint of the season recorded a total audience of 8.4 million, at 28% versus qualifying at the same Grand Prix in 2021. With strong growth in Brazil, and in the US. The Imola weekend on this Sky Sport Italy website recorded that 74% increase in unique user compared to the Emilia GP in 2021. On F1 social platforms, we saw one 149 million video view, up 36% versus Imola in 2021 and 45 minutes engagements, a 43% increase versus 2021. However, the start of the season so far is Ferrari, which has shown real strength with the car and ensures [Indiscernible] leading the Driver’s Championship by 27 points. Red Bull are catching up, and we expect the season to continue to create great racing and close battle at the front. As the construction has continued to refine the new cars. We expect more surprises during the season and opportunities for great racing across the grid. As confirmed on our last earnings…

Thank you, Stefano and Brian. We hope you'll tune into our inaugural Miami GP this weekend. We do appreciate your continued interest in Liberty Media and look forward to a healthy and productive 2022. And with that operator, I'd like to open the line for questions.

[Operator Instructions] We'll go first to David Karnovsky with JPMorgan.

Hi, thank you. With the Las Vegas Grand Prix, I was hoping you could discuss a little bit more the decision to promote this yourself as opposed to a third party. This is primarily about capturing the financial upside beyond what you could get on a promoter fee. Would you look to apply this model elsewhere? And then Greg, I think at the start of the call, you mentioned $240 million purchase for land adjacent to the site in Vegas. Just wondering if you could provide some incremental detail on what you're buying here and kind of how that ties into the race logistics. Thanks.

Well, I'll take a cut and let Stefano add, I think I indicated we're buying 39 acres for $240 million. And that'll be the site of the pit and paddock and some other hospitality. We don't have any other financial details yet to release on what else will be spent on that site. I think our decision to promote Vegas in conjunction with Live Nation and local partners is driven by a couple of things, one proximity, it's fairly easy relative to being in Denver to get to Vegas for us to do the work. And we have some knowledge of the local US market relative to many other markets. But I think more importantly, we see the opportunity to be a promoter as a way to expand our understanding the business, understand what, how to be a the best Formula One product on the track for other promoters as well, to look at an opportunity to grow our knowledge and our understanding and potentially promote other races down the road. And lastly, I think Vegas is going to be large and unique, perhaps unique opportunity. So from a financial perspective, we think this one sets up pretty well to be worth the time extra focus to become the promoter. Stefano, I don't know what you would add.

No, thanks. Greg, was very spot on all the points. I would say that as we remember, David, Vegas has been always a place where we do believe that the association between the values of Formula One and the glamour and the attractiveness, the possibilities to be in that community is crucial. But I would say on top of the financial things that we can see around that business, we can be seen the enabler to maximize what potentially Vegas could be for Formula One in terms of awareness, in terms of business creation, in terms of activating an area of the world where we can bring internationality and I think that is a great win to win business also for the ones that are investing there. But for sure our knowledge of the business and our opportunity to explore with our Live Nation partner and I think it's the best in order to make sure that in next year in November, when we're going to have to race that event will be spectacular. That will be unique, as I would say we can feel here in Miami already.

We will take our next question from Bryan Kraft with Deutsche Bank.

Hi, good morning, I had a high level question and one on Formula One, if you don't mind, I guess, Greg, first, what are your overall thoughts on the economy and the interest rate environment? And how are they impacting your decisions around capital allocation, capital structure and potential new investments? Is now the time to say deploy capital for new investments, given the decline in asset prices? Are you more of the mind that cash preservation is most important now? And then, on the Formula One side, I guess, Stefano or Greg, can you talk about how Formula One benefits in the -- from what appears to be really strong economics around the Miami Grand Prix? I think the terms there for Miami are a bit more variable than some of your other race promotion deals. So any color there would be great. And I guess, as a follow up to David's question, was anything that you were seeing in Miami, did that help to inform your strategy to become the promoter for Vegas? Because you saw that things were going so well there and saw an opportunity to participate in a bigger way and the upside, and then I had one more just on the investment in Vegas and developing that, in terms of order of magnitude, how much bigger might the Vegas build out get in terms of dollars versus what you've already laid out for this year? And how would you think about potential external financing there? Whether it's debt specifically on the project, bringing in some of the creative stuff like you did, maybe with the Braves in Atlanta. Thanks.

So I'm going to parse those. On the last one, I don't think we're ready to talk any more about the outlays at Vegas, it will be bigger than a breadbox but manageable. I don't think we'll need outside partners. And I don't think only debt we have quite a lot of cash at F1. I'll let Stefano talk a little bit about more about what Miami informed us and I'll talk more broadly about cash in the market. Thanks.

Thanks, Greg. Right. I mean, as you know, different form of relation with the promoter is related to maximize the opportunity that the each place can bring to Formula One. And I think that it's clear that what we can see, I mean, just arrived two days ago in Miami, I mean, the vibes that we have created this Formula One is immense is great. And a keen developer, let's see, two strategy and that one, how we can maximize the value that Formula One will bring to community, but also how we can maximize the value of our partners that are coming here and investing for Formula One can see as once again, the enabling factor of creating business opportunity for them. And this is on direct value that Formula One is bringing very highly today because of the success of our international platform. And of course, the fact that here we invested together with our promoters, the Miami Dolphins, is because they knew the community, they have the right expertise to maximize in the shorter term as possible, what we want to bring here, for Formula One, and as I said, the success is already high before this type of event. And of course, this is the first time we are here, we can see a different business model having a lot of corporate business that wants to develop the data to a different mode that is different from place to place. So this is something that also from our side will be very important to learn in order to be even more effective when it comes to Las Vegas. And we're going to be direct able to promotion of it.

So on the larger question about the market environment, it's scary to try and imagine investing, catching a falling knife in this industry environment and stocks. But I have seen general, we try and take a longer view. There are opportunities that can create in these environments, some of the best deals we've done, like SiriusXM, were created in difficult economic times, we are lucky to have not only cash availability at the SPAC and F1, significant excess cash at both, and strong free cash flows at Sirius and Formula One. That I think that creates opportunity for us exactly when that will be timed. And when we'll make a decision. We have a lot of benefits in our model. But we have some disadvantages. It's not like we can turn around and just say buy 5% of the company in the market, we think the bottom is it's a longer cycle in finding deals. But I definitely think the environment will create opportunities for us, and we'll be on the lookout.

We'll take our next question from Vijay Jayant with Evercore.

Thanks, on Formula One. On the Las Vegas race for next year. Should we think about that as an incremental race? So are we going to 24 races assuming you get a replacement for Russia this year? And again, what is the policy to actually add more races? At least reading, some of the drivers keep complaining that too many races already, is that like a regulatory process that you have to go through with the FIA or the teams, anything on that would be appreciated. And then on some of the new races coming back since COVID, really Japan and Singapore, they used to be reasonable sponsors for them. That's pretty material ones, I think. Is that an expectation we should have that they come back? I think Singapore Airlines and Honda. Thanks so much.

Thanks, Vijay. I mean I can answer on the calendar. As you know, first of all, we will have not published at the calendar for next year. In terms of process, that there is an agreement within us the FIA and the teams to discuss, and it's on our side as a commercial right holder to make sure that we find the right balance between the number of events, historical events, new opportunities that can become because we are a world championship. And I think, if you think back a couple of years ago, as always, the right value for having a good calendar is related to the demand and to the offer that we can provide. And I think that today, we are always talking about 23, 24 races, and that what we believe today is the right number, considering the success that we are living today. While we were talking about Las Vegas, that will be in the calendar. Of course, that's the only thing that we have asked for next year. And I will say on the other hand, you will see soon what will be our strategy. And we have to respect the process as we discuss. And we're going to announce it not earlier that at the end of summer, because that's something that we want to keep it and prepare in the right way. With regard to the local promoters and slash sponsorship with Japan and Singapore. Yesterday, we have already announced that Singapore Airlines will be part of the promotional package on Singapore, because for them is a very important partner. And we respect that, Japan, we are -- you will discover soon that of course, for Honda, for example, because of their decision to quit officially Formula One, there could be something special that we want to recognize for them during that event. So this is part of the strategic discussion that we are having with our promoters. And I think that the economical benefit, of course will go into the system and of course also with us.

We'll take our next question from Stephen Laszczyk with Goldman Sachs.

Great, thank you, one on Formula One, revenue in the first quarter came in a little bit stronger than most of us expected. I was wondering if you could help us maybe unpack drivers of that strains maybe across media right sponsorship rates commission and other revenues even at that high level?

I'm sorry, revenue beat expectations. Yes, Q1 was ahead. Well, I mean, for Formula One, obviously, we had two races versus one last year. And we're really back to more normal activities than we've been we've been over the past couple of years. So you had full crowds. And we had good sponsorship revenue as well. Also freight costs have been up a bit. And some of those costs are obviously passed on to the team. So there's incremental benefit there. But normal activities, compared to the past couple of years is really where we've seen the benefit.

Yes, if I can just add, I think we've seen growth in almost every revenue category. But the way we recognize revenue randomly across races probably had the single largest impact the fact that it was two versus one in the first quarter, recognizing that many of our revenue streams are recognized ratably than could tie to the particular race.

Got it, thanks for that. And then maybe one for Greg on sports media rights, I'm curious how you think the interest and ultimately the value of sports media rights could be impacted over the long term. If some of these concerns around growing subscriber growth ultimately play out? Do you think it helps improve [Indiscernible] given your unique live content? Or is the softening market something that you think affects content spend more broadly?

Yes, I think it's a complicated topic. And partly where you sit is how you view it. And when I say that, I think there will be strains on the Braves, potentially over the long term as the RSN become less included in the bundle on a regular basis, that'll put pressure on some of the RSN revenue streams, the Braves in particular have a very strong RSN revenue stream and a lot of demand. So we may be less impacted than many, but obviously that turmoil it could be a negative. On the other hand, Formula One has seen increases in demand. And increases in viewership. And we have the US media rights is commonly known up for bid right now, beginning for next year season. And we have a lot of interest not only from traditional linear players, but digital players. And the offset to some of the decline in cable subs is the increase in some of the digital subscriptions. So that opportunity is, I think in the net, we're probably better off with more players bidding than the changing landscape, maybe little plus or minus, and then a charter, which is not the focus of today's call, we have a whole another set of dynamics where in some cases were helped. And in some cases, we may be hurt. So you really do either, a lot changing and a lot of it depends on which company we're talking about.

We'll take our next question from Barton Crockett with Rosenblatt securities.

Great, thanks for taking the question. I wanted to put one question out, which comes from an investor, but I thought it was a good question, which is looking at the Braves, they're trading right now at market value of maybe 3.5x or so kind of sales. And you've seen private market transactions for baseball teams close to 7x kind of sales range. And so the question is why won't you guys take some more steps to try and achieve that value right now for the Braves? One of the things that would seem to be open to you is that you now have a second ATV with Formula One, and now Braves. So it'd be possible to split maybe the Braves offers an actual stock, which might help the value process, and get people thinking about private market transactions, maybe down the road. So kind of curious what your thought processes there, why you haven't pursued those type of opportunities to date?

Great question. Even if it's not yours, Barton, from the investor still a good question. I think we are looking at all options. And considering what we might do, some of these things are more recent about when our ATP flexibility has occurred. There's some issues also, we're still looking at around Sirius and what we might do there, as you know, we crossed -- just crossed over the 80 there, we've just had Formula One become an ATP. So there's some moving targets. And we evaluate all opportunities. And I think your investor is probably right, I'm not sure 7x we'll see. But certainly, the multiple we're trading it is lower than that multiple, which has been in private transactions, whether it would still trade to that level of what it's a private sale transaction versus a public market transaction, open question. But I do agree that probably having the flexibility to do that would probably improve trading over time.

Okay. And then also on the Braves, so I wanted to ask about the RSN deal with the Valley RSN. And they're pursued, obviously, rights from teams to do the direct to consumer streaming service. The Braves are not yet signed up for that. But we did see that, a friend of the Braves family and Charter has done a recent deal with Sinclair that involved the RSNs. And I'm just wondering, in the past, you guys have seemed very skeptical about signing up for, to have the Braves carried on that. It seems like you weren't really into that. Now Charter has done a deal with them. I'm just wondering if there's any evolution in your thinking or whether it still seems like not likely that you want to do that?

Well, I think that's evolving, Barton, as well, and where Charter is like kind of similar to the answer I gave before where you sit, defines what you want to see happen. We have a good RSN deal that runs out till ‘27. I still think that's probably more valuable less than any digital deal. And they are incremental kind of digital deals that are around that potentially. And there you've seen growth in lots of kind of digital around baseball, and now people like Apple entering to buy rights. So I think it's evolving. I don't know if Valley is going to be the lead player. They've got their challenges, but we're certainly open to watching how the market evolves.

We'll take our next question from David Joyce with Barclays.

Thank you, another question on Formula One, please. Conceptually, how should we be thinking about the principal versus agency relationship on self-promoting this? Not looking for any financial specifics but just accounting wise, whether it be something where Live Nation is the promoter and is taking all the top line, but then they have the operating expenses, and therefore Formula One would get at least something along the lines of race promotion fee plus a margin, or is this something that is all going to be reflected directly on the Formula One's financials? And our partners – and how our partners reflected in that

I'll start and let Brian give the really accurate answers. In general, we're the primary partner, Live Nation is the -- from a financial perspective is a secondary partner. They have a role is very important. But most of the capital investment, most of the outlays will come from us not from Live Nation. And we don't anticipate that this is going to be called out separately on our income statements, it won't be material in that sense. So the lines will generally be folded in promoter fees, and the like, sponsorship, hospitality, et cetera. But Brian, you might, you correct me on?

No, that's very accurate. I would we'll consolidate, as Greg said. So the revenue and CapEx will be on our books, as well as the costs. And also, as Greg said, we would expect that we need to ultimately fine tune this once we have the race. But our expectation right now that you would see the revenues go into their traditional buckets, so paddock club would go into other revenue and then sponsorship then would go where sponsorship currently goes. And then to the extent we're selling tickets, we would expect that probably goes into our promoter revenues. So it'll look very similar except for the fact that we're consolidating the costs, which normally and all the revenue, was under normal promoter relationship, we just have that fee.

We'll go next to Jason Bazinet with Citi.

Another question on Formula One. You mentioned that you may over time maybe promote other races. And I guess if you look at the 24-ish races or whatever, some of those obviously, are in iconic places where you probably won't self-promote. But if you just you were going to blue sky it, how many of the 23 other races that you wouldn't be self-promoting would be in the bucket where you might self-promote?

I don't think we've been, I’ll let Stefano add, I don't think we've announced any plans, we're going to start and see where, how we do this, hopefully make the success of it, we believe we can make it. I would only cautiously say, don't be so certain that places which are iconic, or places where we will not eventually become a self-promoter. I wouldn't cast aside that opportunity. Stefano, what might you add?

No, absolutely, Greg. I think that the beauty if I may say that of this moment, is it's because the new promoters are really putting new energy and new vibes into the system, I think is something that has a collateral effect on the traditional promoter that needs to keep up the pace with respect to and we do respect a lot our promoters because they are the ones that really working with us to make sure that we have a great race show around the world. But this effect is giving us an incredible boost to make sure that all the system is very active to maximize what we're bringing into the platform. And this is really what Greg said is never say never. But with this in mind, I would say we are very happy with the promoters that working with us. They're very, very loyal, reliable partners, on which we're going to build up even a stronger future together.

We'll take our final question from Matthew Harrigan with Benchmark.

Thank you. Clearly, you have a takeoff in the US for Formula One, which is really going to help with ESPN at the same time. You've got a lot of geopolitics -- geopolitical changes, Sochi going away, whac-a-mole zero COVID and China hopefully Shanghai comes back in particularly with the desirability of getting more better times in the US if it really becomes even more appealing for ESPN. Would you be more inclined to look at bringing back something like Nurburgring and maybe even promoting it yourself and some of the classic venues and kind of going more US and Europe versus a lot of the expanse in the second place in Asia and the Middle East? I know some of the Middle East races are hugely successful and they're going to stay around. But the world is changing so much. It looks like Formula One's a winner, but just how complex is your life after everything going on in the world on geopolitics? Thanks.

Well, what I can say Matthews that Formula One and we prove to be, let's say as flexible as possible, also in the COVID situation to maximize the fact that we wanted to have a great championship. And our duty is to make sure that we, first of all, our world championship. And we are investing either with partners or either with us involved directly in that to make sure that the strategic market has become crucial Formula One will be part of it. And you correctly say the US has an incredible boom in the last, I would say two years. And the duty is to make sure that we can even maximize more the effect on that. But we have other areas of the world that needs to be developed and need to be respected because of the tradition. But tradition doesn't mean that it's something given for granted, tradition is a great base on wish we're going to build up a better future. Europe has to stay for sure, with a good bunch of number of races in our calendar, they will stay, and you were talking about Nurburgring. I mean, the German landscape is for sure a very interesting landscape on which no matter who will be the promoter, we need to see what could be the action, if needed, that we can recover that in the calendar, I'm sure if you want to be specific on that something that could happen soon to be very important to be back on the calendar. But we don't have to forget that we have -- we want to invest in the Far East world because we so far being affected by COVID. But there is a great potential to grow there. We have to have -- other end of the world which is Africa, on which we may develop business there. So is a great moment for us to maximize the opportunities to see what would be the rights, right catalogue in the future of Formula One, we will not take the out of the equation [Indiscernible] having some places with rotational principles, because that will give a leverage to be multiple markets. So as I said, that is really our strategic thinking with regard to our future calendar.

And I guess continuing with the German theme, are still discussion of new OEMs coming in to Formula One. I know you can't be specific, but it feels like there are a lot of positive things still pushing in that direction. Are you still having discussions with various people on that?

Well, as you can imagine, Matthew, we cannot be specific on that. The good news is that we can say what we read. And we know we're doing working with all the manufacturer, if I may, on that specific point without saying anything related to something that we cannot say. The good and incredible news that today Formula One is really showing the leadership in the technological landscape of the automotive business in the motorsport, of course, and our choices related to sustainable in the future. And our strong path that we want to prove to the world that we are really serious in the carbon net zero within 2030 is something that really gives us credibility. And this is the reason why everyone not only the ones that you read, are really interested to have talks with us.

Operator, I think that we're done. To listening audience, again, thank you for your interest in Liberty Media. As we said, we hope to see some of you here in Miami. And for those who are not able to get to Miami, we do encourage you to watch and hope to speak to you again next quarter.

Thank you. Now we'll conclude today's call. We appreciate your participation.